Mumbai: Insurer can't reject claim in toto, says forum, directs HDFC ERGO to pay ₹14.25 lakh

Mumbai: A district consumer commission, south Mumbai, has directed the HDFC ERGO General Insurance Company Ltd to give claim money of Rs14.25 lakh with 8% interest for a stolen truck.

The insurer had rejected the claim contending that a spare set of keys was inside the vehicle when it was stolen. Notably, the HDFC ERGO had asked the truck owner to state the aforementioned fact in an affidavit, with the promise of passing the claim. However, it later backed off. 

Rs 30,000 mental agony and litigation cost

After purchasing a truck for transportation business, the complainant, Mohammed Khan, bought a policy worth Rs19 lakh. A first information report (FIR) that the truck has been stolen was filed on January 10, 2015, a day before the policy was about to expire. Subsequently, the Wadala resident filed for a claim but it was rejected as the surveyor's report stated that the truck was stolen due Khan's negligence.

During the hearing, the insurer averred that the complaint was malafide while asserting that it should have been filed in a civil court as he is doing business for profit and does not fit in the definition of a consumer. 

The commission observed that Khan was a consumer as vehicle insurance cover was in his name. Citing a case law wherein a similar argument of negligence was made, it ruled that the insurer can't repudiate the claim in toto and directed that 75% of sum assured be given on non-standard basis along with Rs30,000 towards mental agony and litigation cost. The claim money has to be given within 30 days of order, which was passed on March 23, 2023.